The Finn Valley Railway had reached Stranorlar in 1863.
The West Donegal Railway Company was incorporated by an act of July 1879 to extend the Finn Valley Railway line south west to Donegal, a distance of 18 miles in length.
[1] Construction started on 1 August 1880, and with difficulties in raising finance was opened on 25 April 1882, 4 miles short of Donegal.
It took another 7 years before the last 4 miles into Donegal could be constructed, opening in September 1889.
Three tank engines were obtained from Sharp, Stewart and Company, named Alice, Blanche and Lydia.